The "Hyundai Fortune"

• Judge: Belinda Ang Saw Ean J
• Judgment Date: 01 March 2004
• Neutral Citation: [2004] SGHC 45
• Citation: [2004] SGHC 45
• Defendant Counsel: Bazul Ashhab Bin Abdul Kader (T S Oon and Bazul)
• Published date: 06 March 2004
• Plaintiff Counsel: Liew Teck Huat (Niru and Co)
• Date: 01 March 2004
• Docket Number: Admiralty in Rem No 169 of 2003
• Court: High Court (Singapore)
• Subject Matter: Conflict of Laws,Whether there was real question of liability to be tried in jurisdiction of choice,Factors to be considered,Choice of jurisdiction,Exclusive,Stay of action,Whether owners of vessel entitled to jurisdiction clause in bill of lading,Whether strong cause was shown,Whether action in Singapore should be stayed in favour of jurisdiction of choice in bill of lading

1 March 2004

Belinda Ang Saw Ean J:

1 On 20 November 2003, I allowed the appeal against the decision of the assistant registrar who had on 13 October 2003 granted a stay of this action on the ground that the parties had agreed to refer the dispute in question to the Seoul Civil District Court in Korea. The defendants have appealed against my decision. I now publish my reasons.

2 The plaintiffs, Uni-Fruitveg Suppliers, are wholesale fruit merchants carrying on business at Pasir Panjang Wholesale Centre, Singapore. They had imported from China a consignment comprising 1,473 cartons of hami-melons which were shipped to Singapore in a 40ft reefer container. On arrival at Singapore on 7 July 2002, some 1,232 cartons of hami-melons were found badly damaged. The plaintiffs attributed the damage to the defendants’ failure to provide a reefer container that was capable of maintaining the requisite pre-set temperature of 3°C throughout the transit.

3 The plaintiffs, as cargo owners, consignees and/or holders of bill of lading no HDMU YNSG3043853 dated 5 July 2002, commenced in rem proceedings against the defendants as owners of Hyundai Fortune claiming damages for loss and damage to the consignment of hami-melons. The Hyundai Fortune was arrested on what appeared, from the affidavit of Lim Lay Ping of the plaintiffs filed in support of the warrant of arrest, to be a claim founded on tort. At the material time, the owners of the Hyundai Fortune were EMF International SA. The managers of the vessel were reported in Lloyd’s List of Shipowners 2002-03 as Hyundai Merchant Marine Co Ltd. The latter company was also named in bill of lading no HDMU YNSG3043853 as the carriers, that is to say, the contracting carriers. As such, the owners of the Hyundai Fortune were the performing carriers and seemingly, they would not be entitled to claim the benefit of the jurisdiction clause in the bill of lading unless the bill of lading terms expressly provided or conferred the benefit of the jurisdiction clause on the defendants.

4 However, this was not a point raised in arguments either below before the assistant registrar or on appeal. Somehow, the parties were content to proceed as given that the dispute in this action arose out of the contract of carriage contained in or evidenced by bill of lading no HDMU YNSG3043853 and the parties to this action were bound by the terms of the bill of lading. Even with this approach, I was equally satisfied that in the particular circumstances of this case, the action should not be stayed in favour of Korea.

5 The contract of carriage contained the following clause:

30. GOVERNING LAW AND JURISDICTION

The claim arising from or in connection with or relating to this Bill of Lading shall be exclusively governed by the law of Korea except otherwise provided in this Bill of Lading. Any and all action concerning custody or carriage under this Bill of Lading whether based on breach of contract, tort or otherwise shall be brought before the Seoul Civil District Court in Korea.

6 The defendants’ case for a stay of the Singapore action for Seoul was, on its face, simple. There was a jurisdiction clause in the bill of lading and there was no reason why a stay of proceedings should not be granted.

7 It is settled law that the court would grant a stay of the action in aid of the jurisdiction clause unless the claimant is able to establish that exceptional circumstance amounting to strong cause exists to warrant a refusal to stay the proceedings. In other words, the claimant has to justify why he should be allowed to act contrary to his agreement. He would have to demonstrate with cogent facts that to require him to adhere to the terms of the clause would, in the circumstances, not be reasonable or just. This approach is clear from the line of authorities beginning with Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1975–1977] SLR 258 to Golden Shore Transportation Pte Ltd v UCO Bank [2004] 1 SLR 6.

8 When exercising its discretion, the court has to undertake an inquiry into the specific matters set out in the principles formulated in Amerco Timbers as well as other matters to be considered under the broad heading of “all the circumstances of the particular case” of the principles. Lai Kew Chai J in The Eastern Trust [1994] 2 SLR 526 at 534, [16] said:

How exceptional the circumstances must be in each particular case will turn on the facts of that case. It is always a question of fact and degree.

The court has to also have in mind the strong bias adopted in the authorities in favour of enforcing the agreement. What amounts to a strong cause for refusing a stay depends upon the facts of each particular case, but guidance can be obtained from the authorities as to certain circumstances which should be accepted as sufficient and those which should not be. An example is where there is no arguable defence to the claim. As it is the claimant who is seeking to break his contractual promise upon where to sue, the burden is on him to show why a stay should not be granted.

9 It was not in dispute that the action brought by the plaintiffs fell within the scope of the agreement to litigate in Korea. The plaintiffs’ principal reason for resisting a stay was that the claim was indefensible as the Partlow chart clearly showed that the reefer container was not able to maintain the requisite refrigerating temperature throughout the transit. I would explain that a particular carrying temperature was agreed to and inserted on the bill of lading. Added to that, counsel for the plaintiffs, Mr Liew Teck Huat, argued that the defendants’ intransigent attitude towards the claim gave the plaintiffs the impression that there was no arguable defence. And since the defendants were unable to show that there was a real dispute or arguable defence to the claim, it would be difficult for the defendants to contend that they seriously desired trial in the agreed forum. It would be right in the circumstances for the court to doubt the genuineness of the defendants’ insistence that the claim be tried in the agreed forum.

10 Furthermore, Mr Liew pointed to some strong connecting factors in the case with Singapore. The dispute had no or little connection with Korea. The Hyundai Fortune was a Panamanian flagged vessel. The shippers were from Hong Kong. The reefer container was received for shipment at Shenzhen, China, for overseas shipment from Hong Kong to Singapore. Hyundai Merchant Marine Co Ltd, the vessel’s managers in Korea, have a Singapore office, Hyundai Merchant Marine (S) Pte Ltd. George Lee Hon Kwong (“Lee”), who had affirmed two affidavits on behalf of the defendants, is the general manager of Hyundai Merchant Marine (S) Pte Ltd. Singapore was the port of discharge and is the place of business of the plaintiffs. The cargo damage survey was carried out by surveyors based in Singapore. The evidence and witnesses are therefore located in Singapore. The documents relating to this consignment in the English language would not require translation into the Korean language if the litigation continued in Singapore. There would also be no need for the services of a Korean interpreter. I would add that whilst the managers of the vessel were a Korean company with a Seoul address, the claim would most likely be handled and considered by the London based managers of the vessel’s protection and indemnity club.

11 After the survey of the consignment on 9 July 2002, the plaintiffs submitted a claim for their losses and expenses in the total sum of US$8,396.92. They first wrote to Hyundai Merchant Marine (S) Pte Ltd on 21 August 2002 with supporting documents. Prior to that, the plaintiffs had on or about 9 July 2002 notified Hyundai Merchant Marine (S) Pte Ltd of the cargo damage and called for a joint survey. In that same message, the carrier and ship were held responsible for the plaintiffs’ loss and damage. The Partlow chart is a chart that records the temperature of the reefer container. It showed that at certain stages of the transit, the consignment was not refrigerated at the pre-set temperature of 3°C. There was no response at all to the plaintiffs’ demand letter of 21 August 2002. That prompted the plaintiffs to instruct M/s Niru & Co to pursue the claim. M/s Niru & Co wrote on 7 December 2002 to Hyundai...